For all intents and purposes, yesterday’s potential reversal signal
on the NASDAQ ended up being negated by day’s end. In other words, the
short trade is off, which is precisely why we said let’s not do anything
until it confirms. Interestingly enough, the S&P 500 closed right
on its number, 2,365.
However, it’s close wasn’t enough either, so the markets are now in a position to potentially move higher.
Does it mean we can’t get a selloff now? No, but it does mean the technical context for a selloff has been greatly reduced. This is why it’s so imperative we don’t jump the gun when the technical context isn’t there.
The bottom line is it appears the markets could be in for another nice leg up. The question at this point isn’t really if, it’s more a matter of when. However, the longer these markets continue to grind sideways now, the better and better it makes for another potentially strong leg up.
With that, it looks like oil could be bottoming out for at least a good while. And if that happens, we can be rest assured the major indices are likely to get a lift as well.
Provided below are daily and monthly charts of the price of light crude. As you can see on the daily chart of light crude, it has achieved a key 5/8th’s retracement, while at the same time on its monthly chart it has found its way back to its 3X3 DMA, which also appears to be making an attempt to cross its 25X5 DMA, as well as working to put in a nice V bottom of sorts.
All good context to suggest oil could be very close to a tradable bottom right now. However, should yesterday’s low get taken out to the downside, we’re likely looking at another potential leg down in crude.
Although we do expect volatility around current levels, we’re still convinced oil is going to end up much higher when it’s all said and done, despite all of the rhetoric of oil inventory buildups.
Sometimes the obvious isn’t what ends up happening, and these days we’ll take the technicals over the fundamentals on a short-term basis right now any day.
We’ve got the Fed today, but honestly who cares? We’re likely to get more of the same, a token hike because things are supposedly pretty good out there. All of whatever she’s about to say is likely already priced into the markets. It would seriously take something off the wall for the markets to react dramatically.
However, it’s close wasn’t enough either, so the markets are now in a position to potentially move higher.
Does it mean we can’t get a selloff now? No, but it does mean the technical context for a selloff has been greatly reduced. This is why it’s so imperative we don’t jump the gun when the technical context isn’t there.
The bottom line is it appears the markets could be in for another nice leg up. The question at this point isn’t really if, it’s more a matter of when. However, the longer these markets continue to grind sideways now, the better and better it makes for another potentially strong leg up.
With that, it looks like oil could be bottoming out for at least a good while. And if that happens, we can be rest assured the major indices are likely to get a lift as well.
Provided below are daily and monthly charts of the price of light crude. As you can see on the daily chart of light crude, it has achieved a key 5/8th’s retracement, while at the same time on its monthly chart it has found its way back to its 3X3 DMA, which also appears to be making an attempt to cross its 25X5 DMA, as well as working to put in a nice V bottom of sorts.
All good context to suggest oil could be very close to a tradable bottom right now. However, should yesterday’s low get taken out to the downside, we’re likely looking at another potential leg down in crude.
Although we do expect volatility around current levels, we’re still convinced oil is going to end up much higher when it’s all said and done, despite all of the rhetoric of oil inventory buildups.
Sometimes the obvious isn’t what ends up happening, and these days we’ll take the technicals over the fundamentals on a short-term basis right now any day.
We’ve got the Fed today, but honestly who cares? We’re likely to get more of the same, a token hike because things are supposedly pretty good out there. All of whatever she’s about to say is likely already priced into the markets. It would seriously take something off the wall for the markets to react dramatically.
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